Did she give you a reason as to why she needs this time?
Thank you for clarifying.
If she's asking for some time from you, try to have her tell you how long is she talking about? A few weeks, a couple of months, etc. and what exactly would she be doing during this time - go to counseling, engage in self introspection, and so on.
It would be helpful if she is able to let you know what is she expecting from you during this period of time.
Her unhappiness does not have to be related to the marriage or you. It could be a case of early mid life crisis, feeling depressed and projecting that onto you, feeling unfulfilled in her life and thinking that she's missing something.
You could ask her if she may be interested in couple's counseling or if she's thinking of working on these issues (whatever they are if she knows ) on her own.
You can honor her wish for time and she'd need to be specific about how this time will be used. If you resist, she may use that against you and blame you for her "unhappiness" And, you can speak to her and ask her to think of how this is going to effect the children as well in the long run.
You could ask her to work on this together in therapy or with a relationship coach. Needing space does not really have to mean spending time apart (unless your work or other obligations require it) To have time to herself it could mean that she is putting some time aside i.e. an hour or two a week to speak with a therapist, to talk to someone trusted i.e. minister or a friend and sort things out. If she feels depressed rather than unhappy (some people confuse the two) she could meet with a clinician to explore different treatment options. If she thinks that there is something else that she wants out of life, perhaps it has nothing to do with the marriage stopping her from getting it but rather her own self defeating thinking.
If you're taking care of the children, you would not leave her and go miles away. Having space could mean that she is not looking for sexual intimacy or that she wants to spend some time out of the house. These are things that she can explore and you can help her re-evaluate what other options she can resort to in order to "figure out" what is it she thinks she's working on.
It may be possible that if she looks at things from another perspective she can still work on her issues without the two of you being physically apart miles away.